WEF 2023: Amid recession fears, Davos hosts global elite

Last year, Ukraine dominated the discourse. This year, an energy crunch and recession risk will.

WEF founder and chairman Klaus Schwab will highlight the multiple crises facing the world on the agenda of the Davos meeting. | Photo Credit: Laurent Gillieron/KEYSTONE/picture alliance

The Davos crowd is returning to a familiar setting. But the lush green meadows that formed the backdrop of the first-ever “spring Davos” in May 2022 have been replaced by snow-covered slopes, where snow boots and fur coats have made a comeback.

While the weather may have changed from 2022, the main talking points remain the same. The war in Ukraine and its massive economic fallout are once again expected to dominate the agenda of the annual event in the Swiss Alpine resort.

The World Economic Forum’s annual meeting attended by global political and business leaders, celebrities, and prominent social activists is taking place at a time the world economy is under extreme stress, reeling from high inflation, an energy crisis, and other supply disruptions caused by the war, and a resurgence of COVID-19 cases in China.

“Economic, environmental, social, and geopolitical crises are converging and conflating, creating an extremely versatile and uncertain future,” WEF founder Klaus Schwab told reporters. “The annual meeting at Davos shall try to make sure that leaders do not remain trapped in this crisis mindset.”

The five-day meeting, which convenes under the banner of “Cooperation in a Fragmented World,” will see over 50 heads of state and government take part. Among the expected guests are German Chancellor Olaf Scholz, European Commission President Ursula von der Leyen, and Spanish Prime Minister Pedro Sanchez.

Some recently elected leaders, including South Korean President Yoon Suk Yeol, Colombian President Gustavo Petro, and President Ferdinand Marcos Jr. of the Philippines are also expected. The African contingent will be led by President Cyril Ramaphosa of South Africa and President Samia Suluhu Hassan of Tanzania.

The US will be represented by President Jo Biden’s climate envoy, John Kerry, and Trade Representative Katherine Tai.

There will be no participation from Russia, as the country’s politicians and business leaders remain shunned from the meeting. The WEF froze its ties with Russian entities in 2022 after Moscow invaded Ukraine in late February.

Ukraine will, once again, be sending a high-level delegation. However, organisers have refused to share further details for security reasons.

Recession risk

The 53rd edition of the Davos meeting takes place amid one of the steepest economic slowdowns of this century, with the head of the International Monetary Fund, Kristalina Georgieva, warning that a third of the global economy could be hit by a recession this year.

The conflict in Ukraine and Western sanctions against Russia have led to an unprecedented energy crunch. While inflation in advanced economies such as the US and the eurozone seems to have peaked, it remains uncomfortably high, forcing central banks to stay on course with aggressive rate hikes. That means higher borrowing costs in the face of a slowing economy, and it also risks worsening a global debt crisis in developing countries, including in Africa.

The World Bank has warned that the current economic crisis could cause poverty to rise in sub-Saharan Africa, which is already home to about 60 per cent of the world’s extreme poor.

An annual risks survey published by the WEF on January 11 put the global cost of living crisis caused by the COVID-19 pandemic and Russia’s invasion of Ukraine as the top immediate risk, saying energy and food supply crunches are likely to persist for the next two years.

The meeting in Davos “will happen against the most complex geopolitical and geo-economic backdrop in decades,” said WEF President Borge Brende. “There really is a lot at stake when it comes to the global economy to make sure that we avoid a global recession, how to avoid low growth, high inflation and high debt.”

A record 56 finance ministers are coming to Davos this year, and so are 19 governors of central banks.

Back to business

The Davos meeting is returning to its traditional winter slot for the first time since 2020, when the COVID-19 pandemic first hit the world. The event was held virtually in 2021 and was organised in May 2022.

Shifting the event from its usual January to May slot meant several high-profile political and business leaders could not attend due to diary clashes.

However, this year Davos will host its biggest-ever business participation with 1,500 business leaders taking part, among them 600 chief executive officers of some of the world’s biggest firms.